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Siemens Soars on WiMax

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LR Mobile News Analysis
Light Reading
2/18/2005
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Siemens AG (NYSE: SI; Frankfurt: SIE) this week revealed further plans to develop its own 802.16 kit, in contrast to rivals that have opted to rely on broadband wireless vendor Alvarion Ltd. (Nasdaq: ALVR) for the production of early WiMax equipment.

The German vendor used the 3GSM Congress in Cannes to unveil details of its offering, dubbed "SkyMAX" [ed. note: oh dear... oh dear, oh dear], which is planned for launch sometime in the second half of this year (see Siemens Spews News at 3GSM).

A company statement notes that initial kit will support the Institute of Electrical and Electronics Engineers Inc. (IEEE)'s 802.16-2004 fixed-wireless standard “for stationary IP-based broadband access,” and will be capable of upgrading to the mobile 802.16e specification once ratification is complete.

The move sees Siemens deliver on previous promises to take an independent stance on WiMax. Last July the company struck an OEM deal with Alvarion for the supply of "pre-WiMax" kit but was keen to stress at the time it would eventually manufacture its own standards-based 802.16 equipment (see Siemens Sticks to WiMax).

Meanwhile, rivals Alcatel (NYSE: ALA; Paris: CGEP:PA) and Lucent Technologies Inc. (NYSE: LU) are set to resell Alvarion’s fixed wireless 802.16 kit following earlier partnership announcements (see Alvarion & Alcatel Get Fixed Up and Lucent to Resell Alvarion).

The remaining four big-name incumbent cellular vendors -- Ericsson AB (Nasdaq: ERICY), Motorola Inc. (NYSE: MOT), Nokia Corp. (NYSE: NOK), and Nortel Networks Ltd. (NYSE/Toronto: NT) -- have all joined the WiMax Forum but have yet to reveal details of any product plans (see Ericsson Hovers on WiMax, Moto Joins WiMax Forum, Nokia Rejoins WiMax Forum, and Nortel Joins WiMax ).

Analysts claim that Siemens’ independent approach gives it tighter control over 802.16 development, but will also pose risks for the German vendor. “Unlike a company such as Alvarion, Siemens is not well known as a fixed-wireless vendor, and SkyMAX will compete against some entrenched and proven products when it comes to market,” notes Peter Jarich of Current Analysis. “Siemens’ in-house WiMax product has more on the line when it comes to WiMax’s success; if the technology fails to gain traction in the market, Siemens has more to lose than those vendors simply partnering on 802.16.”

As for the existing partnership between Alvarion and Siemens, Alvarion's VP of marketing, Carlton O'Neal, claims the move is unlikely to draw an immediate end to the tieup.

"For the record, Siemens has told us that they will sell both and have put no boundaries on that," he writes in an email note to Unstrung.

Siemens was unable to provide comment by press time.

— Justin Springham, Senior Editor, Europe, Unstrung

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